Why the Netflix offer with advertising does not find its audience


It was one of Netflix’s great levers to turn the corner after a complicated 2022. The new subscription offer with advertising, cheaper, was promised a bright future according to the company. Ted Sarandos, general manager of the company, even explained that a complete range of offers with advertising was in preparation.

When its first formula was launched on November 3 in the United States, Netflix therefore saw its future in these cheaper offers with advertising. But the first subscription figures could well cool his enthusiasm.

According to a study by Antenna, only 9% of new subscribers subscribed to the new offer called Essential with advertising in France. Among them, 43% (almost half therefore) were already subscribers to the platform but wanted to reduce the price of their monthly subscription. In total, according to Antenna, the offer Essential with advertising represents only 0.2% of American subscribers.

Questioned by the Wall Street Journal, Netflix refuses to confirm these figures. He is “still very early to evolve our offer financed by advertising, she explains, we are pleased with its launch and engagement, and the willingness of advertisers to partner with Netflix.” An eagerness that the Digiday site contradicts: according to him, many advertisers would have backtracked in the face of the mixed reception of the offer.

However, in a conference with investors, Ted Sarandos explained that advertising on Netflix was still in its infancy. “For us, advertising is like crawling, walking and running, did he declare, we are clearly on all fours at the moment.”

Why is the Netflix offer with advertising slipping?

If Netflix’s marketing discourse is intended to be reassuring, the Antenna study is worrying. It must be said that the offer with advertising is not the most attractive. If the price is more accessible (6 euros in France), the limitations are far too numerous: a single account, very average image quality, many advertising interruptions.

6 euros, it was the price of the complete offer to Disney + at its launch (today at 9 euros). Paramount+, which has just landed in France, costs 8 euros per month. In the first case, we have an optimal image quality (4K, Dolby Vision and all the rest), in the second we take advantage of a new very qualitative catalog.

Beyond the competition, it is above all the small gap with the offer Essential which prevents the offer with advertising from making its way. Proposed at 9 euros, the offer Essential is almost the same as the one with ads, but without the ads.

Above all, there are a good number of TV packages or bundled offers (that of Canal+ is undoubtedly the most interesting) making it possible to bring together several platforms for a very attractive price. So inevitably, the offer with advertising has all the more difficulty in finding its way.

A matter of time as the boss of Netflix says? Without a doubt. The company is not the only one to embark on this adventure. In December 2022, Disney also launched its Disney+ offer with advertising. Available only in the United States for the moment, it is much more interesting than that of Netflix (no technical limitations). Disney also explained that this offer was the first of a long line. Advertising seems to be the future of streaming platforms.

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